After spending six years working for Goldman Sachs as an investment banker, Bjarke Mikkelsen was faced with a dilemma.
“I had a very comfortable life, but I didn’t really feel like I had a purpose,” she told CNBC Make It.
“In banking, you’re always an advisor in the end. I knew I wanted to try and run a business… I wanted to do something in technology but also something that had very operational aspects because I like to build things.”
those aspirations brought the then 34-year-old to Pakistan, where he built an e-commerce marketplace called Daraz.
“The idea was always to build something inspired by Amazon and Alibaba, where you have three elements: an e-commerce marketplace, logistics, and a payment infrastructure.”
One of the things I like about e-commerce is that it’s fair, it’s a fantastic equalizer.
Founder and CEO, Daraz
In 2018, three years after the business launched, Alibaba bought Daraz in an undisclosed deal, as part of the Chinese e-commerce giant’s efforts to expand in South Asia.
Daraz now operates in Pakistan, Bangladesh, Sri Lanka, Nepal and Myanmar, serving 40 million active customers, the company said.
“One of the things I like most about e-commerce is that it’s fair, it’s a fantastic equalizer,” Mikkelsen said.
“It doesn’t matter if you are a man or a woman or you live in a big city or in a rural area… Everyone has the same opportunity both as a seller to start a business, as a customer, you also have access to the same type of quality service” .
That’s especially true in South Asia, according to Mikkelsen, where not everyone has the “equal access to offline retail infrastructure.”
“The equalizing factor is actually something that really inspired me and I wanted to try and do something about it.”
How did this 41-year-old turn his startup into one of South Asia’s e-commerce players? Mikkelsen shares his top tips with CNBC Make It.
1. Do your due diligence
Mikkelsen left investment banking in 2015, a time when there was “a lot of hype around tech startups.”
“It was very easy to get funding to start something.”
But he said it was important to do your due diligence when evaluating opportunities and finding target consumers nonetheless.
“I spent a lot of time studying the markets and understanding where the potential is,” Mikkelsen said.
“I started looking at South Asia and realized it was a big part of the world and there was no e-commerce at the time. There are 500 million people, it’s a huge opportunity that is often overlooked.”
Mikkelsen also moved to Pakistan, where he lived for three years, spending much of his time traveling to rural areas to understand the people, their culture and their needs.
“If I came here to try to build an e-commerce business that looks the same way Amazon looks in Denmark, that wouldn’t work,” he added.
“We need to add value so that in the end we can also build a profitable business.”
2. Keep it 100%
For Mikkelsen, being able to take his business “from 90% to 100%” is where the magic happens.
“You underestimate how much effort it takes to launch a great product and build a great service… 90% is really nothing, it will never work, but you have to get to 100%.”
That was something he learned the hard way in Daraz’s early days, given that he had no experience building an eCommerce website.
What I really practice a lot is slowing down, pausing and knowing that everything is as good as it can be. [even] when everyone else thinks we’re done.
Founder and CEO, Daraz
“I didn’t know what I was doing…just getting some things 100% right was very, very challenging.”
Slowing down, according to Mikkelsen, is key to achieving excellence.
“E-commerce is very fast paced and people are always under pressure to move on to the next project or the next goal or the next campaign,” he added.
“But what I really practice a lot is slowing down, pausing and knowing that everything is as good as it can be.” [even] when everyone else thinks we’re done.”
3. The work is never done
Although Daraz is on “a path to profitability” with a positive gross margin, Mikkelsen said the job is not done yet.
“I used to think that at some point, once we get to a billion dollar business… we’ll have stable processes and everything. But now I realized that even for Alibaba, it’s a mechanism that will always evolve,” said.
“Our business model will never be ready. We need to keep optimizing and changing for externalities in markets and new trends.”
Mikkelsen’s next approach? Making sure Daraz scales efficiently.
“This year… we are slowing down a bit to focus on attracting the right customers and creating the customer value propositions for each of the [business] categories,” said Bjarke Mikkelsen, CEO and founder of Daraz.
“This year, we’re probably going to do about a billion dollars in gross merchandise volume… we’re slowing down a little bit to focus on attracting the right customers and creating the customer value propositions for each of the [business] categories”.
For now, though, Mikkelsen is happy with the sense of purpose he’s found, which “is not lacking.”
“We have over 40 million active customers on the app every month and we have over 100,000 sellers on our platform, where we’re really creating opportunity and improving lives,” he added.
4. Sink or swim
The final piece of advice Mikkelsen has for entrepreneurs is to approach your journey with a “sink or swim” mentality.
“I would really encourage people to try and not be afraid to fail. Sometimes you fail and that’s okay,” he said.
“Often you learn to swim along the way and the development process is much, much faster if you do it that way.”
While it was “very, very scary” to go from banking to being a tech entrepreneur, Mikkelsen has no regrets.
“It was the best thing I ever did for myself.”
Do not miss: Two of his startups failed. Now this 30-year-old has just pocketed $32 million for his company.
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